Restaurants outside the city center draw a more diverse set of patrons than those in downtown: a low-priced lunch can bring together grandmas, office workers, local thugs, and tourists alike, as evidenced at lunchtime in Rákóczi restaurant, located a bit outside the city center in Budapest's District 8. The restaurant overlooks Rákóczi Square, an area once known for its grimy streets, rampant prostitution, and low-life characters. Today, there’s a glitzy subway stop here and the neighborhood is rapidly gentrifying (pop into Csiga Café across the street for proof).
Rákóczi is far from serving the best food in Budapest, but it feels more authentic than the dime-a-dozen “traditional Hungarian” restaurants in downtown. You're unlikely to go wrong with the goulash, the crispy veal schnitzel (€9), and I always finish my meal here with a couple of túrós palacsinta, crepes filled with sweet-tart cottage cheese (€1). During the warmer months, try to score a seat at the tables on the outdoor terrace. After your meal, visit the Rákóczi Market Hall across the street, where time has stopped in around 1980.